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A company is considering a project with annual after-tax cash flows of $2,500.00 per year for six years. The company's cost of capital is 14
A company is considering a project with annual after-tax cash flows of $2,500.00 per year for six years. The company's cost of capital is 14 percent. Present and future value factors for a 14 percent interest rate for six years are as follows:
Future value of $1
2.195
Present value of $1
0.456
Future value of a series of equal payments
8.536
Present value of a series of equal payments
3.889
Using the net present value method, what is the maximum amount that the company should invest?
A)
$1,140.00
B)
$5,487.50
C)
$9,722.50
D)
$21,340.00
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